The A to Z of Trump's Tariff Travesty

I wrote it like a primer so maybe our Dear Leader will understand it

The admin officials talking about using tariffs to return manufacturing to the US …

a.) Do not know anything about trade or trade policy.

b.) Do not have the first idea about how tariffs work.

c.) Do not comprehend how global supply chains work. I’m not even sure they know what global supply chains are.

d.) Do not have any idea what a modest percentage of overall output, trade or jobs are related to manufacturing or that many if not most manufacturing jobs actually suck.

e.) Do not know why that percentage has steadily fallen for decades.

f.) Do not understand the role of technology and productivity in reducing the number of manufacturing jobs. (Far more manufacturing jobs have been relocated to the past than to any other country.)

g.) Do not appreciate the value of the service sector in post-industrial economies.

h.) Do not understand how trade balances work and why certain countries and regions have massive advantages in specific sectors or sub-sectors. (The whole idea of comparative advantages is lost on them.)

i.) Do not understand that it is often perfectly healthy to be running a trade deficit.

j.) Do not care that tariffs are not just taxes they are regressive taxes. (In fact, it’s worse than that. They are pretending tariffs increase revenues that will thereby allow us to cut taxes for the rich and big companies while in fact, the tariffs are actually a way to shift the tax burden to the middle class and the poor. Some of what they’re doing is driven by ignorance. But some of it is driven by greed and is a complete scam.)

k.) Do not recognize that if manufacturing were returned to the US it would lead to massive increases in the cost of goods because of the costs of production in the US. (This in turn could lead to foreign goods being competitive again.)

l.) Do not appreciate how open global markets have benefitted the US more than any other nation for decades.

m.) Are trying desperately to recreate a time when jobs were crappier, paid less, and we were a weaker, smaller economy.

n.) Do not seem to understand the basics of any other aspect of economics either.

o.) Do not seem to have any sense of the basics of history. (Key lessons of history being that massive tariffs don’t work, trade wars are disastrous and there is a reason we consider the bad old days to be the bad old days.)

p.) Do not understand how alienating our allies and principal trading partners weakens us. (Their gated community, isolationist, view of America is another way they demonstrate how little they understand history. Globalization is not a policy someone mandated. It is a force that has transformed the world since the first guy or woman figured out that there was another village down the road to whom they could sell their saber tooth tiger skins. Globalization can’t be reversed. It hasn’t been managed perfectly and the dislocations it has caused must be better addressed. But it is a genie that is not going back in the bottle.)

q.) Are incapable of understanding their own lack of understanding. (Yes, yes, nerd sports fans, this is where you get to mention Dunning-Kruger as so many of you love to do. Personally, it is so overused now it irritates me every time it is mentioned. But look, reading this is a personal, private experience for you and if you can’t help yourself, have at it.)

r.) Do not understand that our rivals will eagerly seek to take advantage of our erratic, hostile, bullying trade policies.

s.) Do not understand that the Trump tariffs are destroying one of America's most valuable assets, the trust other nations place in us and the value they placed on the US having been a partner on which they could depend throughout the past century. Nor do they realize that once trust is lost it takes generations before it can be regained…if it ever can be regained.

t.) Do not realize that in addition to the inflation the tariffs will drive that inflation will keep interest rates up and thus slow growth further. (That’s why everyone is talking about recession right now. Yes, imminent recession even though everything was humming along pretty damn smoothly before Trump and his wrecking crew took office. Yes, that’s right. There was not only no urgent need to do this…there was no need to do this at all.

u.) Do not seem to want or appreciate the benefits of a strong dollar or of the dollar as the world's reserve currency. Maybe some of these nudniks thought this would benefit their bitcoin holdings but guess what, that is not the way this has panned out so far.

v.) Do not understand how their tax cuts for the rich will increase the deficit and force the US to borrow more and more from overseas.

w.) Do not understand how other countries will step in to fill the void created by costlier US products and that markets lost may never come back (as happened the last time Trump played with tariffs.)

x.) Do not understand the potential costs to the US, our companies and our people of the retaliatory tariffs that are being and will be imposed by other nations.

y.) Do not recognize that market shocks caused by terrible trade policies like those we are seeing will eliminate retirement savings of Americans thus making them less inclined to spend which will constrain US growth (and that's before Trump Social Security and Medicare and Medicaid cuts undercut retirement savings further still)which could stunt US growth for many years to come even as it consigns tens of millions of Americans to poverty and suffering. Also, as noted earlier, they’re rich, they live in a bubble (albeit it a bubble full of toxic ignorance and arrogance) and therefore they just don’t care.

z.) Don't seem to appreciate that such actions will not only weaken the country but that they will have dire political consequences for Trump & the GOP. Which, if you are looking for a silver lining to all of this, is the best I can do.

That's my first crack at the A to Z of Trump's Tariffs. But, believe me, it is only scratching the surface of what's wrong with these policies and the cocktail of other terrible economic, social and international policies that they are a part of.

Which markets clearly understand.

And which Trump and Team MAGA clearly do not.